G.R. No. 123184 January 22, 1999
SERAFIN QUEBEC SR., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PAMFILO POMBO SR., and ANTONIO QUEBEC, respondents.

FACTS

Petitioner Serafin Quebec Sr. was the owner of Canhagimet Express, a transportation company. Private respondent Antonio Quebec, brother of petitioner, was hired in September 1981 as inspector and liaison officer with supervisory/managerial duties at a monthly salary of P5,000.00 but without 13th month pay, overtime pay, service incentive leave pay, and night premium pay. He was dismissed without notice and hearing in 1991 by Paciencia Quebec, the petitioner’s wife, on suspicion of covering up the petitioner’s womanizing activities and due to alleged misappropriation of company funds. Private respondent Pamfilo Pombo Sr., brother-in-law of petitioner, was hired on 5 November 1981 as driver-mechanic and co-manager at a monthly salary of P4,000.00. He was dismissed without notice and hearing in October 1990 allegedly for failure to help repair a bus and for shipping rattan and stalagmites via company buses without paying freightage. Both filed illegal dismissal cases, which were consolidated. The Labor Arbiter dismissed the complaints, finding the dismissals valid due to serious misconduct (misappropriation for Antonio and unauthorized shipments for Pamfilo). The NLRC initially dismissed the appeal but, upon motion for reconsideration, reversed itself, finding that private respondents were illegally dismissed due to lack of substantial evidence for the causes of dismissal and absence of due process. The NLRC awarded back wages, separation pay, service incentive leave pay, and 13th month pay. Petitioner assailed the NLRC decision via certiorari.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in finding that private respondents Pamfilo Pombo Sr. and Antonio Quebec were illegally dismissed.

RULING

The Supreme Court dismissed the petition, affirming the NLRC’s finding of illegal dismissal with modifications to the monetary awards. The Court held that the existence of an employer-employee relationship was admitted. On the substantive aspect, the employer failed to discharge the burden of proving valid causes for dismissal. The charges (covering up womanizing, misappropriation, failure to help repair, unauthorized shipments) were based on bare allegations and unsubstantiated by evidence. Mere accusation or pronouncement of loss of confidence is insufficient; it must be supported by substantial evidence of an actual breach of duty. On the procedural aspect, the dismissals were effected without notice and hearing, a charge never controverted by the petitioner. Consequently, the dismissals were illegal. The award of separation pay in lieu of reinstatement was affirmed due to the sale of Canhagimet Express. The Court modified the NLRC decision by ordering the payment of full back wages inclusive of allowances and benefits from the time compensation was withheld up to the finality of the decision, instead of only up to 31 August 1995. The grant of separation pay was affirmed.